The gains, almost six times forecasts, surprised economists, but most — even after a close look at the details — said it was a pleasant surprise.

“Just as the prevailing wisdom had fully settled on the view that the economy was softening substantially, along comes a rock-solid Canadian employment result. The November report was sturdy from head to toe,” wrote Doug Porter, deputy chief economist at BMO Capital Markets.

The November report was sturdy from head to toe

Statistics Canada said Friday that 59,300 people found work last month, eclipsing economists’ forecasts ranged widely from 10,000 to 17,000 new jobs, after a relatively flat performance in October, as the country’s labour market continued a pattern of dramatic monthly fluctuations.

The number of private sector employees rose by 48,000, while there was little change in public sector employment and self-employment. This dropped the unemployment rate 0.2 percentage points to 7.2%.

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What’s surprising is that the job surge comes as the Canadian economy appears to be softening.

“It comes at a time when the housing market is slowing, governments are trimming their sales, consumer spending seem to be cooling; we get reports of large companies laying people off, then boom, we have one of the best job reports of the year. It just shows there is some underlying resilience in the economy,” Mr. Porter said.

Economists at Capital Economics, however, who predict a 25% correction in Canada’s housing market, think the numbers are too good to be true — and gains in coming months will be no nowhere near as strong.

I’m a bit perplexed as to how we got a sizable job gain and no growth in hours worked

“Given the slowing trend in economic growth and uncertain global economic outlook, the pace of economic growth we foresee ahead is suggestive of average monthly job gains around 10,000,” said Capital Economics’ David Madani.

Capital thinks the housing correction now underway will weigh heavily on the construction sector next year — causing the loss of as many as 115,000 jobs, a 0.7 percentage point shock to the jobless rate.

Derek Holt, Scotiabank’s vice-president of economics, noted that the burst of jobs was not accompanied by an increase in hours worked.

“I’m a bit perplexed as to how we got a sizable job gain and no growth in hours worked,” he wrote in a report. “It’s hours worked that drive incomes, not the body count.”

He suggested that maybe the already employed are working fewer hours offsetting growth.

Another concern is that productivity growth remains low. A Statistics Canada report released Friday showed a fall in labour productivity. “That’s the flip side of this report,” Mr. Porter said. “Yeah, we’re getting decent job growth but we’re not getting much output growth. We’re still hiring people but it’s not turning into overall economic growth.”

All of the jobs were in the service sector led by wholesale/retail trade and hospitality which are generally lower paying sectors. Construction jobs fell and manufacturing jobs also dropped by about 20,000.

“If we had a perfect report, we would have also seen gains in some of the higher paying industries like construction. But we don’t want to look an early holiday season gift horse in the mouth either,” said Avery Shenfeld, chief economist at CIBC.

“The burst of hiring to some extent defies logic. We’ve had a lot of employment gain but not much to show for it over the past year in terms of economic output. Nevertheless, it’s still good news Canadians are finding work but we would like to see more evidence that is showing up in production growth that can sustain this pace of hiring.”

The Canadian dollar jumped to a one-month high against its U.S. counterpart after the data was released. The Canadian currency hit C$0.9878 to the greenback, or $1.0124. It had traded at C$0.9925, or $1.0076, just before the jobs reports were released.

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